Posts tagged usu
Posts tagged usu
A friend of mine, Edward McMahon expressed some legal opinions the other day in relation to the case of Raue v Morris. They can be accessed here:
The opinions expressed by Edward, well-meaning as they may be, are infected with superficiality and do not express views that are capable of being supported by the authorities.
There are 3 fundamental errors, in addition to other sundry errors, in the opinion expressed. I would like to draw attention to those errors and invite correction.
Construction of the Constitution
The first error in Edward’s legal analysis is the opinion that ‘Those wishing to dismiss Tom must fulfill the conditions of 3.1.3 and 3.1.4 of the regulations’ is the only method by which a director can be dismissed from office.
As per the judgment of Bellew J, there are two methods by which a director can be removed from the Board. The first is through the mechanism of clause 7.5(a)(i) in conjunction with clause 9.2(f)(ii). As Bellew J observed in paragraphs 80-82:
Pursuant to the provisions of the Constitution:
(i) membership of the Union is a pre-requisite to holding office as a Director [clause 7.5(a)(i)];
(ii) the Constitution confers, upon the Board, the power to expel a member from membership of the Union if that member is, in the opinion of the Board, guilty of misconduct [clause 9.2(f)(ii)].
Importantly, clause 9.2(f)(E), by its terms, expressly contemplates that the power in clause 9.2(f)(ii) may be exercised in respect of a Director.
In my view, in light of these provisions, the Board has an express power to expel a person from membership of the Union on the grounds of misconduct. The effect of such a decision is that a person so expelled cannot, by virtue of clause 7.5(a)(i), hold office as a Director. In these circumstances I do not accept the submission that the Constitution does not contemplate the expulsion of a Director, or that the Board has no power under the Constitution to pass a motion for such expulsion.
This error meant that Edward’s analysis was confined to considering the requirements of cll 3.1.3 and 3.1.4 of the Constitution, and not on the less onerous grounds of removing a member from the Union, and thereby vacating the member’s office as director.
Breach of Fiduciary Duties
The paragraph that disposes of this argument is framed thusly:
Tom is accused of breaching a fiduciary duty. It is said that by leaking the information in question, Tom has jeopardized the board’s financial relationship with the university. This assertion firstly assumes that the USU receives SSAF monies from university management only so long as it behaves precisely as university management desires. This immediately undercuts any notion of student democracy within the USU. It further assumes that this role of the USU as an obedient child is somehow formalized in a financial arrangement between the bodies and that Tom has jeopordised it by leaking a few words from an unrelated report. Certainly Tom’s actions do not fit neatly into an established category of breach of fiduciary duty, and it takes a scheming mind indeed to advance the argument.
Aside from misunderstanding the principles of fiduciary law, this reasoning is shows glaring lapses of logic. To begin, the foundation for this alleged breach is that, as admitted, ‘by leaking the information in question, Tom has jeopardized the board’s financial relationship with the university’. Edward attempts to assail the argument put forward by proponents of Tom’s removal by arguing three propositions:
The first proposition is not contradicted by evidence supplied by Edward.
The second proposition about student democracy is completely irrelevant to fiduciary law, except insofar as disclosure and consent is concerned, which it is not in the present instance.
The third proposition is not contradicted by evidence supplied by Edward.
In criticising the reasoning in this paragraph, other than in respect of Edward’s second proposition, I does not deny the merits of the argument. I merely invite Edward to revise his reasons.
Edward continues to say that “Certainly Tom’s actions do not fit neatly into an established category of breach of fiduciary duty, and it takes a scheming mind indeed to advance the argument”. This approach is a clever revision of fiduciary law that is not supported by the authorities. It is unnecessary to fit a set of facts into an established category of breach. So much transpires from the leading judgment of Deane J in Chan v Zachariah (1984) 154 CLR 178 at 198-9:
The variations between more precise formulations of the principle governing the liability to account are largely the result of the fact that what is conveniently regarded as the one “fundamental rule” embodies two themes. The first is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest. The second is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of his fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing his position for his personal advantage. Notwithstanding authoritative statements to the effect that the “use of fiduciary position” doctrine is but an illustration or part of a wider “conflict of interest and duty” doctrine… the two themes, while overlapping, are distinct.
What emerges from the quoted paragraph is that it is not necessary to find established categories of breach, for example, breach by misappropriation of funds, or breach by exploiting a corporate opportunity for personal gain. It is sufficient to show that the fiduciary acted in a manner where his or her personal interest conflicted with his or her fiduciary duty.
Improper Use of Information
Edward here conflates two concepts, impropriety and due care and diligence. As I understand Edward’s argument, he is advancing a positive case that a director’s duty of due care and diligence informs contours of impropriety. This novel approach is not supported by authority.
First, it is trite to observe that a director, or any person for that matter, may be under concurrent but separate duties and the duties do not all meld into one.
Let me illustrate this with an analogy: in one sense, everyone is under a duty of care with respect to liability in negligence. It is not an answer to a suit that I made improper use of information, that I was particularly careful when I was doing so.
Second, Edward makes the claim that ‘Tom’s duty of care and diligence demanded that USU members be informed of this collaboration, so that they could make an informed decision about their participation in this industrial action’. This claim is unsupported by authority.
What is right and what is legal may, at times, fail to coincide. What is just and what is fair may also at times fail to coincide. This is such a case.
Every member of the USU has consented to the rules of governance to which they subscribed upon becoming a member. Therefore one cannot complain of being treated unjustly if they are subject to the rules to which they have voluntarily subscribed.
Accepting that what is right and what is legal does not coincide, I have taken the view that morally speaking, Tom should not be removed for preferring the interests of the protestors over the interests of the USU.
It does engender mild irritation however when people advocate incorrect views of the law with such confidence. And so, while I would prefer not to be seen as advancing a case against Tom, I must correct what in my view is an manifestly unreasonable interpretation of the law.
I have been questioned of late as to my progressive credentials. Other than being an avid cocksucker, I am a feminist, an animal rights activist and an environmentalist. I’m just not militant or arrogant about it. But I feel this is an appropriate time for me to humbly impart some of my values and explain how I can reconcile the strength of my convictions and tolerance for those who possess opposing views.
I believe that we have not, as a society, come to a point where we can dispense with pro-life discourse. That is the regrettable truth. The very fact that pro-choice camp would call their opponents misogynists and the pro-life camp would call their opponents butchers is evidence of the fact.
The pity is that the arguments are so polarized there’s no way for the two groups to reconcile. That is why we need a pro-life discourse to complement a pro-choice discourse.
Allow me to illustrate:
If we take the hypothetical that women are given the right to determine their reproductive autonomy we are still left with questions that must necessarily be answered.
These are questions to which I humbly admit I do not have the answer. These are questions to which if you believe you alone hold the answer to, then you are a fool. In the end, we must as a society come together to some amicable settlement. We must balance a plurality of views. Before then no side will benefit.
For you, whether you are pro-life or pro-choice, to determine that no view bar yours should prevail, then you are guilty of tyranny. Before you deny another the right to express himself, ask yourself, what entitles me to judge my equal?
Whether the USU is the proper or even a legitimate forum for the constitution of a pro-life society or pro-life debate is a different matter altogether. Whether the members of the pro-life society will conduct themselves with integrity or otherwise bring their names to shame, we cannot at this point in time pass judgment on them. My concern is only that we as proponents of the pro-choice view, who are so often the ones that also allege discrimination, prejudice and oppression, might be guilty of the same.